CORRECTED RULING
(Issued pursuant to the Court Orders issued on 18th March 2026)
Introduction and Background
1. I have considered the application dated 11th February 2025 by which the applicant seeks to have thirty-three (33) title deeds relating to LR No. Kajiado/Kisaju/1223 deposited in Court, or alternatively, for the 1st respondent to hand them over to the 2nd respondent (the Official Receiver), who would then utilize five (5) parcels towards paying the expenses of the liquidation and distribute the balance equally between the applicant and the 1st respondent. The application is supported by an affidavit sworn by the applicant, LUCY WANGUI NJUGUNA, on 11th February 2025.
2. The Official Receiver filed a response supporting the application through a replying affidavit sworn by SYLVIA GITHUNGO, an Assistant Official Receiver, on 22nd September 2025. The application is opposed by way of a replying affidavit sworn by JOSEPH MUNGAI GIKONYO, the 1st respondent, on 6th February 2026. I have equally considered the written submissions filed by the respective parties.
Analysis and Determination
3. The issue for determination is whether the applicant is entitled to the prayers sought. In resolving this, I must revisit the doctrine of separate corporate personality as established in Salomon v A Salomon & Co Ltd [1897] AC 22 (HL). This doctrine affirms that a company is a distinct legal entity, separate from its shareholders and directors.
4. From the pleadings and submissions, it is undisputed that VALYARI INTERNATIONAL LIMITED, the Company at the center of these proceedings, has two directors/shareholders. It is also not disputed that the properties in question are registered in the name of the Company. The averment in response to the application that the properties are held in trust by the Company on behalf of the 1st respondent has not been proved. The 1st respondent contends that he sold the property to settle a debt and that the property was subsequently resold to him without any financial contribution from the applicant.
5. Even if this were true, the 1st respondent has not demonstrated how properties belonging to the Company could have been sold by one director, excluding the other, to settle a debt that was not a liability of the Company. No company resolution approving such sale has been presented.
6. Equally, the 1st respondent’s contention that although the land is registered in the Company’s name, it was purchased and funded solely by him, cannot override the principle of corporate personality. While Kenyan courts have recognized that a company may act as a trustee, the circumstances necessary to imply such a trust have not been established here. The assertion that there was an express intention at the time of acquisition that the land would remain the property of the 1st respondent has equally not been proved.
7. That said, the fact of liquidation is equally undisputed. I have seen the consent order dated 14th December 2023 by which the Company was placed in liquidation and the Official Receiver appointed as liquidator. The effects of liquidation are clearly set out under the Insolvency Act, including the vesting of the estate of the liquidated company in the liquidator for realization, distribution, and winding up of the Company as provided under Section 444. The Insolvency Act imposes upon directors and officers of a company undergoing insolvency the statutory duty to fully cooperate with the liquidator. Section 679(2) requires both present and former officers to surrender control of all company assets, books, and documents in their possession or custody to the liquidator.
8. I have been referred to the decision in re Royal Swiss Bakery Limited (Insolvency Petition E046 of 2022) [2023] KEHC 21919 (KLR), where Majanja J held that under Section 444 of the Insolvency Act, once a liquidation order is made, the liquidator assumes control of all property to which the company is or appears to be entitled. I concur with this reasoning. Accordingly, the subject properties in this case are under the control of the liquidator who has expressed his frustration at the 1st respondent’s continued disobedience of Insolvency provisions.
Disposition
9. Accordingly, and for the reasons that I have stated above, I allow the application dated 11th February 2025. The 1st respondent shall hand over forthwith to the 2nd respondent the title deeds described in paragraph 3 of the application. The 2nd respondent shall utilize a portion of the properties towards settling the expenses of the liquidation and distribute the surplus proceeds and properties to the applicant and 2nd respondent.
DATED, SIGNED AND DELIVERED AT NAIROBI
THIS 9th DAY OF FEBRUARY 2026
and CORRECTED
THIS 18th DAY OF MARCH 2026
F. MUGAMBI
JUDGE
(Issued pursuant to the Court Orders issued on 18th March 2026)
Introduction and Background
1. I have considered the application dated 11th February 2025 by which the applicant seeks to have thirty-three (33) title deeds relating to LR No. Kajiado/Kisaju/1223 deposited in Court, or alternatively, for the 1st respondent to hand them over to the 2nd respondent (the Official Receiver), who would then utilize five (5) parcels towards paying the expenses of the liquidation and distribute the balance equally between the applicant and the 1st respondent. The application is supported by an affidavit sworn by the applicant, LUCY WANGUI NJUGUNA, on 11th February 2025.
2. The Official Receiver filed a response supporting the application through a replying affidavit sworn by SYLVIA GITHUNGO, an Assistant Official Receiver, on 22nd September 2025. The application is opposed by way of a replying affidavit sworn by JOSEPH MUNGAI GIKONYO, the 1st respondent, on 6th February 2026. I have equally considered the written submissions filed by the respective parties.
Analysis and Determination
3. The issue for determination is whether the applicant is entitled to the prayers sought. In resolving this, I must revisit the doctrine of separate corporate personality as established in Salomon v A Salomon & Co Ltd [1897] AC 22 (HL). This doctrine affirms that a company is a distinct legal entity, separate from its shareholders and directors.
4. From the pleadings and submissions, it is undisputed that VALYARI INTERNATIONAL LIMITED, the Company at the center of these proceedings, has two directors/shareholders. It is also not disputed that the properties in question are registered in the name of the Company. The averment in response to the application that the properties are held in trust by the Company on behalf of the 1st respondent has not been proved. The 1st respondent contends that he sold the property to settle a debt and that the property was subsequently resold to him without any financial contribution from the applicant.
5. Even if this were true, the 1st respondent has not demonstrated how properties belonging to the Company could have been sold by one director, excluding the other, to settle a debt that was not a liability of the Company. No company resolution approving such sale has been presented.
6. Equally, the 1st respondent’s contention that although the land is registered in the Company’s name, it was purchased and funded solely by him, cannot override the principle of corporate personality. While Kenyan courts have recognized that a company may act as a trustee, the circumstances necessary to imply such a trust have not been established here. The assertion that there was an express intention at the time of acquisition that the land would remain the property of the 1st respondent has equally not been proved.
7. That said, the fact of liquidation is equally undisputed. I have seen the consent order dated 14th December 2023 by which the Company was placed in liquidation and the Official Receiver appointed as liquidator. The effects of liquidation are clearly set out under the Insolvency Act, including the vesting of the estate of the liquidated company in the liquidator for realization, distribution, and winding up of the Company as provided under Section 444. The Insolvency Act imposes upon directors and officers of a company undergoing insolvency the statutory duty to fully cooperate with the liquidator. Section 679(2) requires both present and former officers to surrender control of all company assets, books, and documents in their possession or custody to the liquidator.
8. I have been referred to the decision in re Royal Swiss Bakery Limited (Insolvency Petition E046 of 2022) [2023] KEHC 21919 (KLR), where Majanja J held that under Section 444 of the Insolvency Act, once a liquidation order is made, the liquidator assumes control of all property to which the company is or appears to be entitled. I concur with this reasoning. Accordingly, the subject properties in this case are under the control of the liquidator who has expressed his frustration at the 1st respondent’s continued disobedience of Insolvency provisions.
Disposition
9. Accordingly, and for the reasons that I have stated above, I allow the application dated 11th February 2025. The 1st respondent shall hand over forthwith to the 2nd respondent the title deeds described in paragraph 3 of the application. The 2nd respondent shall utilize a portion of the properties towards settling the expenses of the liquidation and distribute the surplus proceeds and properties to the applicant and 2nd respondent.
DATED, SIGNED AND DELIVERED AT NAIROBI
THIS 9th DAY OF FEBRUARY 2026
and CORRECTED
THIS 18th DAY OF MARCH 2026
F. MUGAMBI
JUDGE